Under the pretext of combating the financial
crisis, Democrats in Congress have been conducting hearings on proposals
to confiscate private retirement accounts and turn them into government-controlled
accounts managed by the Social Security Administration, by implementing
a new tax in the guise of mandatory savings scheme.

Teresa Ghilarducci, professor of economic
policy analysis at the New School for Social Research in New York, testified
before Congress last month, proposing that 401(k)s and IRAs be confiscated
and converted into universal Guaranteed Retirement Accounts (GRAs) managed
by the Social Security Administration.

The GRAs would be enforced by means
of a mandatory savings tax equating to 5 per
cent of an individual's annual paycheck deposited to the GRA. Social
Security and Medicare taxes would still be payable, employers would
no longer would be able to write off their contributions and capital
gains would be taxable year-on-year. In addition, workers could bequeath
only half of their account balances to their heirs, unlike full balances
from existing 401(k) and IRA accounts.

Justifying government intervention,
Ghilarducci cited a 2004 HSBC global survey in claiming, "a third
of Americans wanted the government to force them to save more for retirement."
In actual fact, the survey concluded that Americans wanted the government
to "enforce additional private savings," a vastly different
meaning than mandatory government-run savings, as Karen
McMahan points out.

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The mandatory savings account scheme
is actually a brainchild of lifelong Republican and former chairmen
of the New York Fed, Peter Peterson, who
proposed "mandatory savings accounts," also called "forced
savings accounts," back in 1999.

During a Seattle radio interview on
October 27, Ghilarducci explained the motive behind the plan, stating,
"I'm just rearranging the tax breaks that are available now for
401(k)s and spreading - spreading the wealth."

Ghilarducci let slip the true agenda
being the move in her testimony before Congress and also acknowledged
that social security payments are a form of taxation when she stated,
"Should we mandate savings in a recession? Yes,
as long as fiscal policy provides for short-term stimulus. No one is
proposing we suspend Social Security taxes
in recessions. Households need a source of disciplined savings over
the business cycles."

As Jim
Capo highlights, "Not only does Ghilarducci promote Peterson's
call for mandatory savings, she also fesses up to the crime that is
our Social Security system. Social Security is not the mandatory retirement
savings plan it was sold as to the American people. It is simply another
tax. Ghilarducci admits the bait and switch in one breath and in the
other proposes the next bait and switch. Except, this time it will
be different."

"So, shock! Democrats and Republicans
alike are now proposing a new mandated retirement savings plan. Like
offering voters a choice between growing the government at 4% or 6%,
all that is really being debated is whether our new "savings"
tax will go through the federal government or not, before these protection
racket proceeds are turned over to the crime syndicates in New York
and London for ultimate management and control."

Would the government risk a widespread
revolt and potential riots by confiscating 401(k)s and IRAs? They probably
wouldn't brazenly do it under that banner, but in the name of financial
reform and saving the economy, Americans could find their voluntary
retirement savings stolen and replaced by a government promise of a
completely devalued mandatory savings account.

As the Lew
Rockwell blog notes, the intention of the move is clear, but it
will be down to American citizens whether or not the government is allowed
to get away with it.

Think of it as an ATM for the government.
Part two would be confiscating current 401Ks and IRAs and rolling
them into the GRAs. Knowing that could be very politically unpopular
(riots, perhaps?), Ghilarducci said, "Short term, I propose that
since 401(k) accounts and the like are financial institutions -- the
bank about where 38% of the workforce can
intend to save for their retirement -- Congress let workers trade
their 401(k) and 401(k) - type plan assets (perhaps valued at mid-August
prices) for a Guaranteed Retirement Account composed of government
bonds (earning a 3% return, adjusted for inflation)." ---- "Short
term"? And surely, we'll all "retire" on 3% (or less)
returns."

"So the battle will be to allow "voluntary"
rollover or not, to confiscate or not. You know what a democratic
congress and its left-wing, academia elites want to do, but what will
they be able to get away with doing? I suppose that depends upon peoples'
reaction and their ability to make enough noise to make any confiscation
or mandatory savings too unpopular to jam down our throats.

The move sent stock markets plummeting
with critics accusing the government of stealing the pensions to get
their hands on extra money at a time of economic crisis, as citizens
protested across the country.